The ACIT, Central Circle-1, Rajkot, Rajkot V. M/s. Creative Construction Co., Rajkot

ITA 20/RJT/2021

• Counselvise Citation: [2024] 101 COUNSELVISE.COM (IT) 8896 (ITAT-RAJKOT)
• Duration Of Justice: 2 year(s) 10 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-01-2024
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 10-01-2024
• Assessment Year: 2017-2018
• Appeal Filed On: 25-03-2021
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHRISHRAMDEEPSINHA
• Assessee Lawyers: SHRID.MRINDANI

Judgement Text

आयकरअपीलीयअधिकरण , राजकोटनयायपीी INTHEINCOMETAXAPPELLATETRIBUNAL, RAJKOTBENCH,RAJKOT (ConductedthroughVirtualCourt) BEFOREMSSUCHITRAKAMBLE,JUDICIALMEMBER And SHRIWASEEMAHMED,ACCOUNTANTMEMBER आयकरअपीलसं ./ITANo.20/Rjt/2021 धििाधरणणवध / Asstt.Year:2017-2018 TheA.C.I.T, CentralCircle-1, Rajkot. Vs.M/sCreativeConstructionCo. 200,RaviResidencyPark, 150FeetRingRoad, Nr.RMSQuarter, Rajkot. PAN:AACFC0157G (Applicant)(Respondent) Revenueby:ShriShramdeepSinha,CIT.DR Assesseeby:ShriD.MRindani,A.R सुिणाईकीतारीख /DateofHearing:11/01/2024 घोवणाकीतारीख /DateofPronouncement:31/01/2024 आदेश /ORDER PERWASEEMAHMED,ACCOUNTANTMEMBER: ThecaptionedappealhasbeenfiledattheinstanceoftheRevenueagainst theorderoftheLearnedCommissionerofIncomeTax,(Appeals)-11,arisingin thematterofassessmentorderpassedunderSection143(3)oftheIncomeTax Act,1961(here-in-afterreferredtoas"theAct")relevanttotheAssessmentYear 2017-18. 2.Therevenuehasraisedthefollowinggroundsofappeal: 1.Onthefactsandinthecircumstancesofthecaseandinlaw,learnedCommissioner (Appeals)erredinconsideringthefactsofthecaseandhasignoredthefactsthat ITANo.20/Rjt/2021 A.Y.2017-18 2 additionsweremadeonthebasisofmaterialfacts/digitaldataimpoundedduringthe courseofSurvey. 2.Onthefactsandinthecircumstancesofthecaseandinlaw,learnedCommissioner (Appeals)erredinconfirminglumpsumdisallowancetotheextentofRs.4,00,000/-only outoftotaldisallowanceofRs.3,50,45,472/-madeu/s69CoftheAct,ignoringthefacts thatmostofthesub-contractorshavefiledITRunderpresumptivetaxandcontactdetails intheirITRbelongstotheassessee'srelatedconcern,whichleadstoinferencethatthe paymenttowardsthesubcontractorwereinflated/boguspayments. 3.Onthefactsandcircumstancesofthecaseandinlaw,learnedCommissioner(Appeals) erredinignoringthefactsthatassesseefailedtoprovethegenuinenessofthetransaction duringthecourseofassessmentproceedings,nosupportivedocuments/evidenceswere producedatassessmentstage. 4.Onthefactsandcircumstancesofthecaseandinlaw,learnedCommissioner(Appeals) hasignoredthefactsthattheassesseehasinflatedexpenses,andgenerated unaccounted/undisclosedincome.Therefore,thetaxwasrightlycomputedasperthe provisionsofSec.115BBEoftheI.T.Act. 5.TheappellantpraysthattheorderofthelearnedCommissioner(Appeals)ontheabove groundbesetasideandtheadditionmadeintheAssessmentordermaykindlybe restored. 3.TheSolitaryissueraisesbytherevenueisthattheLd.CIT(A)erredin restrictingtheadditiontoRs.4,00,000/-outofthetotaladditionmadebytheAO forRs.3,50,45,472/-basedonseizeddocumentsinsteadofconfirmingthesame inentirety. 4.Thenecessaryfactsarethattheassesseeinthepresentcase,a partnershipfirm,isengagedinthebusinessofroadconstructionanddevelopment. Therewasasurveyoperationu/s133AoftheActatthebusinesspremisesofM/s ClassicNetworkPvt.Ltd.whereincertaindocumentsofincriminatingnature bearingannexureA-1,A-2andA-4werefound,pertainingtotheassessee.Asper theAO,theseizeddocumentscontaininformationaboutthepaymentmadeby theassesseetovarioussub-contractors.However,theAOtreatedallthepayment madetothesub-contractorasnon-genuinebygivingdetailedreasoningas incorporatedintheassessmentorderandthereforeaddedthesametothetotal incomeoftheassessee. 5.AggrievedassesseepreferredanappealtotheLd.CIT(A)whodeletedthe additionmadebytheAOonvariouscountswhichhasbeendetailedfrompages ITANo.20/Rjt/2021 A.Y.2017-18 3 14to25ofhisorderexceptanad-hocdisallowanceofRs.4,00,000/-only.Thus, theLd.CIT(A)allowedtheappealoftheassesseeinpart. 6.BeingaggrievedbytheorderoftheLd.CIT(A),therevenueisinappeal beforeus. 7.ThelearnedDRvehementlysubmittedthatthepaymentmadetothesub- contractorisbogusinnature.TheLd.DRinsupportofhisargumenthaspointed outthattheemailidandthephonenumberoftheassessee’spersonweregiven inthebankaccountofthesub-contractors. 8.Ontheotherhand,theLd.ARfiledapaperbookrunningfrompages1to 470andsubmittedtheseizeddocumentscontainsinformationaboutcheque paymentmadetothesub-contractoragainsttheexpensesoftheearlieryears.As pertheLd.ARnoexpensequathepaymentincurredintheseizeddocuments pertainstotheyearindispute.Thus,theLd.ARcontendedthatthequestionof disallowanceintheyearunderconsiderationdoesnotarise. 9.BoththeLd.DRandtheLd.ARbeforeusvehementlysupportedtheorder oftheauthoritiesbelowasfavourablethem. 10.Wehaveheardtherivalcontentionsofboththepartiesandperusedthe materialsavailableonrecord.Onperusalofthepaperbookfiledbytheassessee wefindthatitcontainstheledgercopies,bills,acknowledgementofITR, computationofincomeofsub-contractorandFormNo.26Qalongwiththebank statementoftheassesseedemonstratingthepaymenttothesub-contractors.At theoutset,wenotethatallthepaymentsrecordedintheseizeddocumentsare againsttheexpenseswhichwereclaimedintheearlieryears.Therefore,the genuinenessoftheexpenseifatallneedstobedoubtedthesamecanbedonein theearlierassessmentyear.Itisforthereasonthattheassesseehasincurredno expenseintheyearindisputequathepaymentshownintheseizeddocuments. ITANo.20/Rjt/2021 A.Y.2017-18 4 Accordingly,wedonotfindanyinfirmityintheorderoftheLd.CIT(A).Hence,the groundofappealoftherevenueisherebydismissed. 11.Intheresult,theappealfiledbytherevenueisdismissed. OrderpronouncedintheCourton31/01/2024atAhmedabad. Sd/-Sd/- (SUCHITRAKAMBLE)(WASEEMAHMED) JUDICIALMEMBERACCOUNTANTMEMBER (TrueCopy) Ahmedabad;Dated31/01/2024 Manish,Sr.PSTRUECOPY